Tbilisi eliminates secretive offshore intermediaries in power imports from Azerbaijan following years of reporting on inflated costs and connected businessmen.

Prime Minister Irakli Kobakhidze announced that Georgia will eliminate intermediary companies from its electricity imports from neighboring Azerbaijan, a move he said would save the state millions of dollars annually.

The trade has long been plagued by a lack of transparency, with power purchases between the two South Caucasus nations funneled almost entirely through opaque offshore companies, as previously reported by OCCRP and its regional partners. For years, the dominant player in the trade was Sulkhan Papashvili, an influential Georgian businessman.

“Having an intermediary meant additional costs for the state,” Kobakhidze said during a recorded cabinet meeting. “Specifically in the case of Azerbaijan, as a result of removing the intermediary, the state will receive several million annually.”

In 2020, Studio Monitori, OCCRP’s Georgian member center, reported that ordinary Georgians were paying inflated rates for Azerbaijani power due to the middleman arrangement — at the time handled by a Belize-registered firm, Elgreen Holdings.

A 2024 joint investigation by OCCRP, Studio Monitori, iFact, and Mikroskop Media traced the trade through multiple offshore companies in which Papashvili was the sole beneficiary and shareholder. The investigation also revealed that Papashvili maintained separate business ties with relatives of the Azerbaijani officials responsible for approving the energy deals. His legal team denied that these relationships yielded preferential treatment.

In response to a request for comment regarding the government’s announcement, Papashvili’s lawyer, Kakha Sharabidze, said the businessman “has reviewed the prime minister's statement and understands the reasons behind the decision taken.”

Georgian authorities have long kept the details of the import deal secret. The Ministry of Economy and the energy regulator, GNERC, repeatedly redirected investigative inquiries to the state electricity system operator, ESCO, which refused to disclose its contract with Elgreen, citing confidentiality clauses.

occrp.org